It's Expensive To Be An American Senior
From the gas pump to the grocery store, many Americans are getting financially squeezed. Record inflation also meaningfully impacts seniors, typically defined as those 65 years old and above.
There are over 54 million Americans aged 65 and over, with 6 million 85+ years old. According to the U.S. Census Bureau, by the year 2040 there will be 81 million Americans, or almost 1 in 5, who will be 65 or older. It’s also noteworthy the U.S. Department of Health and Human Services found that 28% of adults (14 million) aged 60 and older live alone as well, which can also have negative health impacts.
The growth of the senior population, which is increasingly made up of the Baby Boomer generation, has outpaced the growth of the younger working age population. This dynamic will likely continue to put a strain on the Social Security system as a payout and contribution mismatch occurs (e.g., social security payouts are more than the new contributions coming in). That being said, many seniors still work full-time even after reaching the age, 62 years old, they would qualify to receive Social Security benefits. Some seniors also wait until they reach 67 years old, to maximize their benefit payout.
“As a result of changes to Social Security enacted in 1983, benefits are now expected to be payable in full on a timely basis until 2037, when the trust fund reserves are projected to become exhausted. At the point where the reserves are used up, continuing taxes are expected to be enough to pay 76 percent of scheduled benefits.” - U.S. Social Security Administration
Elder Index & Cost of Senior Living
The Elder Index, developed by the University of Massachusetts Boston, is used to calculate the cost of senior living expenses. The federal government bases its benefit eligibility criteria on the Federal Poverty Level (FPL), which is usually lower than the Elder Index. Remember, seniors often live on a fixed income so highly inflationary environments can meaningfully impact a senior’s “real” purchasing power. It should be noted though that social security benefit payouts do adjust to take inflation into account (at least partially). For example, 9% general inflation consists of a basket of goods and services that may not accurately reflect the cost of living increases seniors practically experience.
The Elder Index allows researchers to tailor the adequacy measure to the elderly while still providing a relatively simple way to evaluate retirement security.” - CONGRESSIONAL BUDGET OFFICE (2017). MEASURING THE ADEQUACY OF RETIREMENT INCOME: A PRIMER
It may not come as a surprise that healthcare costs are usually higher for seniors vs. the younger population, subjecting them to deductibles and expenses related to chronic conditions, such as high blood pressure or diabetes. In addition, seniors physical and cognitive abilities often decline as they get older and become increasingly reliant on others. Sometimes this help comes from family members, like children, while other times it comes from home health aides and other caregivers. Losing one’s physical and cognitive abilities, while also being put under financial stress related to increasing cost of care can leave many seniors (and their families) frustrated, isolated and insecure.
What Can Be Done?
The US spends nearly 20% of its GDP ($12,530 per person) on healthcare, which is more than any other developed country in the world. While there are complex reasons for this, I believe there are simple solutions that can help solve SOME of the problems American seniors face - from reducing financial strain to increasing quality of life.
At Click2MD, we believe having a dedicated, compassionate and affordable physician, who can come to the house, coordinate care among caregivers and keep family members updated, can be meaningfully helpful. In addition, the financial incentive of a flat month-to-month fee, helps create a health plan around preventive care, which seeks to reduce hospitalizations, unnecessary testing & medications and improve quality of life.
In my over 40 years of being a practicing physician, I have treated many seniors. Some were told they only had weeks to live and are still alive today. Others passed away, which is unavoidable sometimes, but I helped them improve the quality of their life before passing, giving them and their families dignity.
Click2MD, was founded and is led by Mian Majeed, MD, is focused on medical home care, primary care, and weight loss.